Family welfare cut pays for child care

Family welfare cut pays for child care

Single parents and families with children at school will be the big losers and thousands of dollars worse off under the Turnbull Government’s overhaul to family payments and child care.

Though Treasurer Scott Morrison declared the revamped changes “fairer and better” than the Government proposed in its Budget last year, they still face a rocky road in the Senate.

Under them, parents claiming just Family Tax Benefit Part A and not using child care will lose about $465 a child because of the staggered abolition of the end-of-year FTB supplement.

And the family payments to single parents with two children will be slashed about $3000 a year when the youngest turns 13.

Ministers stressed that cuts to family payments must be considered with its boost to childcare subsidies, which will give families earning $65,000 to $170,000 a year an average $30 a week more.

With the Senate blocking efforts to rein in welfare, Prime Minister Malcolm Turnbull signalled he was open to alterations. The changes will save about $4.8 billion over four years to pay for the $3.5 billion childcare package aimed at boosting workforce participation.

The end-of-year supplements were introduced in 2004 to cover family tax benefit debts thousands of families incurred after being paid too much welfare after under-estimating income.

Social Services Minister Christian Porter said many families no longer incurred the debts and with the Australian Taxation Office updating its software to allow real-time reporting of earnings, the supplements had served their purpose.

He did not say how many families would be worse off but argued a $10 increase in fortnightly FTB-A payments would cushion some of the blow.

Labor said some people would be thousands of dollars worse off from the combined impact of changes since 2013. A single income family on $65,000 a year with two high school children would lose $5700 when the already axed Schoolkids Bonus ($1712) was included, it said.

Shadow families minister Jenny Macklin said Labor had concerns about the effects on single parents and grandparent carers.